VENTURES AFRICA – Ethiopia has signed two railway construction deals with Chinese and Turkish companies, both deals are valued at $3.2 billion.
According to government officials, the deals are for the construction of a railway that will connect the land-locked Horn of Africa nation to Djibouti’s Tadjourah port to export potash.
Over the past 5 years, Ethiopia’s economy has witnessed high economic growth. And with the new deals, the nation hopes to exploit growing business ties with China, India and Turkey to boost its buoyant economy.
The deals are part of a five-year development plan that was initiated by the government in 2010, through which it aims to carry out power projects and boost the nation’s infrastructure with several new railways.
While explaining the deal, Getachew Betru, head of the Ethiopian Railways Corporation (ERC), said Turkish firm Yapi Merkezi will build a $1.7 billion railway line in the northeast as part of a project that stretches to Djibouti’s third port of Tadjourah, which is under construction.
According to the website of the foreign ministry, Yapi Merkazi is expected to complete its portion of the rail line in 42 months.
Preceding the deal is a $1.5 billion agreement between ERC and China Communications Construction Company to build a different section of the railway line to Tadjourah port.
Ethiopia’s target is to construct 5,000 kilometers of railway lines by the year 2020. According to Ethiopian government, companies from BRIC nations have shown interests in several developmental projects.